Our last blog provided an overview and key takeaways of FINRA’s 2022 Examination and Risk Monitoring Program Report. In this blog, we will take a closer look at FINRA’s top enforcement issues in 2021.

According to Eversheds Sutherland’s annual report of FINRA’s disciplinary actions, the overall total of fines and restitution sharply increased in 2021. The law firm found that fines assessed by FINRA rose 60% from 2020, from $57 million to $91 million. This is the highest amount of total fines since 2016, despite a decrease in cases.

This sharp increase in total fines is largely due to the record-setting $57 million in fines levied against Robinhood Financial. FINRA also ordered the firm to pay $12.6 million in restitution plus interest. These disciplinary actions against Robinhood Financial were for years-long systemic supervisory failures and significant harm suffered by millions of its customers. “The fine imposed in this matter, the highest ever levied by FINRA, reflects the scope and seriousness of Robinhood’s violations, including FINRA’s finding that Robinhood communicated false and misleading information to millions of its customers,” said Jessica Hopper, executive vice president and head of FINRA’s Department of Enforcement, in a press release

The Eversheds Sutherland study listed the top five enforcement issues for 2021 (as measured by total fines assessed):

  • Anti-Money Laundering (AML)
  • Unit Investment Trust (UIT)
  • Suitability
  • Trade Reporting
  • Municipal Securities
FINRA Top Enforcement Issues 2020 vs. 2021

Our chart depicts top enforcement issues comparing 2020 to 2021 using data from the Eversheds Sutherland research. Without the aforementioned Robinhood Financial “mega fine,” FINRA’s fines would have been $34 million in 2021, compared to $57 million fines in 2020 — a decline of more than 40%.

FINRA Audit Guide